Tucked away on the west side of the small town of Broad Channel in the middle of Jamiaca Bay is a narrow, dead end, street that goes by the name of West 12th Road. Those of us who live there know that the nice part about living in a small town is that when you are not quite sure what is going on, someone else always does!
[Peter J. Mahon West 12th Road, Broad Channel]

“Congress never intended to punish responsible homeowners,” Mississippi Republican Steven Palazzo said during floor debate. “That is exactly what FEMA is doing as it implements the law with flawed maps and procedures.”

The legislation repeals a provision of the 2012 law that triggered premium increases if property were sold to a new owner.

The threat of steep increases is “putting a wet blanket on real-estate markets in flood-prone areas” because homeowners can’t find buyers willing to pay higher rates, said New Jersey Democrat Bill Pascrell during debate.

‘Incredible’ Premiums

“No matter where you live in the country, some of the premium escalation has been incredible,” said West Virginia Republican Shelley Moore Capito, who is running for Senate this year.

“We’ve got a lot of hills and hollows” where flooding is a threat, she said. One homeowner planned to “walk away” from his $150,000 home and face mortgage foreclosure after FEMA notified him his flood-insurance premium would rise from $1,000 to $14,000, she said.

The bill was the product of negotiations between House Majority Leader Eric Cantor, a Virginia Republican, and California Representative Maxine Waters, the top Democrat on the Financial Services Committee.

“The legislation ends dramatic increases caused by events such as property sales” and restores “rates for those who played by the rules and built their properties according to code,” Waters said in a floor speech.

Hensarling Bypassed

House leaders bypassed Jeb Hensarling, a Texas Republican and chairman of the Financial Services Committee, who opposes the bill.

“One of the reasons America is going broke is because of poorly designed and government-run insurance programs,” Hensarling said on the House floor. “The program forces 96 percent of all Americans to subsidize the remaining 4 percent regardless of income or need.”

The measure would limit premium increases to 18 percent per policy or 15 percent of an average of premiums in a particular flood zone.

The House bill, H.R. 3370, must be reconciled with legislation passed by the Democratic-controlled Senate that House Republican leaders said would roll back too many of the 2012 law’s changes. The Senate bill is S. 1926.

The small-government groups Club for Growth and Heritage Action for America urged lawmakers to vote against the bill.

“Unfortunately, this shows that House leadership is uncommitted to the limited government reforms that they themselves supported just two years ago,” said a statement by Club for Growth.

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